Businessweek Archives

Why Canada's Economy Is So Stunted

August 01, 1999

Readers Report

Why Canada's Economy Is So Stunted

I was fascinated by the news of rapid growth in self employment in Canada ("Job growth, Canadian-style," Economic Trends, July 12). Canadians have actually known about this trend since 1997, when its importance was highlighted by the federal Advisory Committee on the Changing Workplace.

As a self-employed Canadian (with close to 20 years of professional experience and 44 academic and technical publications on my resume), I hold the view that the reasons have little to do with fast-rising taxation but a lot to do with government failure to support the educational and research infrastructure without which a knowledge-based economy and society cannot thrive.

To provide just one example, U.S. federal funding for medical research, on a per capita basis, is several times the comparable Canadian figure. Canadian scientists with international reputations still find financing both for basic research and for commercialization extremely difficult to obtain. The consequence of this neglect is that opportunities educated Americans take for granted, in both public and private sectors, are virtually nonexistent here.

Canada will soon be in a situation where this trend is all but impossible to reverse. Thus, the much-discussed gap in incomes between the two countries is almost certain to widen, whether or not our domestic right-wing pundits succeed in selling their simple-minded panacea of tax cuts and more tax cuts.

Ted Schrecker

London, Ont.Return to top

Good Reasons for Jesse to Visit the Valley

"Jesse's new target: Silicon Valley" (Social Issues, July 12) unfairly marginalized the Reverend Jesse Jackson's participation as a publicity stunt without presenting the actual evidence of racial discrimination in the high-technology industry. Your staff had access to Silicon Ceiling: Solutions for Closing the Digital Divide, a 600-page report by the Coalition for Fair Employment in Silicon Valley, which reported on 253 high-tech federal contractors. More than 70% of African Americans we surveyed reported workplace discrimination. Only 26 of the 253 companies achieved the Bay Area norm for African-American employees, despite the presence of 300,000 blacks in high-tech jobs nationally--including 150,000 systems analysts and programmers--and despite the existence of 1 million black military veterans under 35 with technical training. The Silicon Ceiling is so daunting that even a black Rhodes Scholar could not get through it. The coalition has discovered many other well-trained professionals with similar experiences.

As bad as things are, we have been solution-oriented. We have prepared a list of 35 effective practices for equal opportunity performance and created a joint Web site and recruitment program among each of the major professional groups in the Bay Area.

By casting the issue as a personality struggle, BUSINESS WEEK unfairly puts CEOs in the position of appearing to oppose fair employment practices that have been part of federal law since 1964. Instead, we call on Silicon Valley companies to end the trend of 90% noncompliance in the industry to save their shareholders from the exposure that recently visited such companies as Hyundai Semiconductor.

John William Templeton

Co-Convenor

Coalition for Fair Employment in Silicon Valley

Oakland, Calif.Return to top

A Welfare Class of College Grads?

I was sorry to see Christopher Farrell, usually a fairly senSible commentator, suggest a government-subsidized system of income-dependent paybacks on college loans ("Loans for college don't have to crush grads" Economics, July 12). Particularly offensive to common sense is his suggestion that those with low lifetime earnings should be excused entirely from repayment, at taxpayer expense. Farrell's heart is no doubt in the right place, but such a system as he outlines would be a fiscal and administrative disaster.

At the very least, there would need to be some checks on loan recipients to verify the low incomes they claim to justify forgiveness or slower repayment. In effect, we would be turning loan recipients into welfare recipients, with verification systems to ensure they still qualified for their benefits.

In addition, the proposal would encourage people to gain degrees in areas of study that, while perhaps interesting and edifying, bear little hope of ever being remunerative. A graduate in a low-paying field doesn't have any "right" to higher income, or to a reduced-cost education, simply because she or he has a degree. This proposal penalizes those who choose to enter fields of study that present good job prospects, and it amounts to an antimarket attempt to favor some lines of worK over others. This is social engineering, not good public policy.